CTL Strategies ranked by Asia Law Profiles as a leading tax law firm in the Maldives
The Asia Law Profiles have ranked CTL Strategies as the leading law firm in the areas of taxation in the Maldives. It has also recognized us as the highly recommended firm in the areas of litigation and disputes.
The team at CTL Strategies has been praised by their clients as “dedicated and professional” in representing them in foreign investment and, cross-border taxation matters. The firm has a notably stellar reputation amongst local and multinational businesses in the Maldives, for managing and handling tax controversies and corporate litigation.
Second Amendment to the Tax Administration Act Ratified
The Second Amendment to the Tax Administration Act, passed in the 45th sitting of the 19th People’s Majlis has been ratified today by the President and published in the Government Gazette.
The legislative changes entered into force through this Amendment seeks to revamp the taxation system in a fair, transparent and efficient manner.
Some of the key amendments reflected in the procedural requirements of MIRA includes; enforcing a time limit of 2 years to conclude an audit and enforcing a statutory period of 120 days to make a decision on objections filed. This is believed to be a step towards procedural fairness because the time taken to make a determination on the aforesaid matters were alluded to be unacceptably lengthy and interminable in the past.
In addition to this, the amendment also eases the appeal process for taxpayers. Hereafter, to gain the right to appeal at the Tax Appeal Tribunal taxpayers are no longer required to pay all outstanding dues to the MIRA- rather, they can proceed with an appeal by settling 30% of the amount in dispute.
Furthermore, while the amendment limits the service period of the Commissioner General of Taxation and the Deputy Commissioner General of Taxation to 5 years with a term limit of 2 terms. The changes also require the existing Commissioner General and Deputy Commissioner General of Taxation to be replaced within 30 days from today.
Other significant changes are found in provisions related to administration of MIRA’s Board, powers of the Tax Appeal Tribunal, tax rulings and exchange of information. Full details are available from the link below:
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(Photo credits: Edition.mv)
Proposed Amendments Eases Foreign Investment Restrictions
The Peoples Majlis, on 22 August 2019, continued their discussion on the bill for the first amendment to the Business Registration Act.
Under the proposed amendment, Section 6 of the Business Registration Act is to be repealed, effectively removing several conditions imposed on foreign investors interested in conducting business in the Maldives. Under the current law, foreign investors are required to make a deposit of USD 100,000 or the entity must maintain capital of USD 1,000,000, and they may be subject to other restrictions such as being prohibited from operating in certain sectors. If the bill is ratified as proposed, these barriers to entry will be removed, effectively allowing for a wider scope of foreign investment opportunities. However, it is understood that although the restrictions imposed by the Business Registration Act are eased, the government will, through other regulatory instruments, restrict the areas that foreign parties may invest.
The members of Parliament, raised concerns on the proposed amendment to remove Section 6 of the Business Registration Act – Business Forms permitted for foreign persons, and policy. While many members construed this to mean that, Foreigners and foreign enterprises will have free reign to carry on with their business in the Maldives, unregulated, the Minister of Economic Development Mr. Fayyaz Ismail stated that all foreigners are required to register as per the Foreign Investment Act of the Maldives. The Minister informed parliamentarians that the current practice, as always, is that no foreign entity can carry on with a business in the Maldives unless registered under the foreign investment act. Further, those parties must also follow all regulations and rules set out by the ministry – restrictions from operating in certain industries, or working in specific vocations such as photography.
The Minister also highlighted that the Business Registration Act, and the proposed amendment, is meant to address largely procedural and administrative matters pertaining to registering business, regardless of whether they are local or foreign. The Bill is meant to streamline registration processes, and enhance ease of doing business in the Maldives.
(Photo credits: Nattu)